Is It Time For A Wealth Tax? Starmer Under Pressure To Ramp Up Charges On The Rich

A protester holds a 'Tax the super-rich' placard during the demonstration.There’s no two ways about it: cash-strapped Britain is struggling to make ends meet right now.Keir Starmer was forced into an embarrassing climbdown by his own backbenchers over planned welfare cuts last week, leaving a £5 billion in the nation’s finances.Sluggish economic growth and higher government borrowing costs are also adding to chancellor Rachel Reeves’ worries.There’s growing speculation that she is thinking of slashing the special educational needs budget to help make ends meet – sparking fears that another Labour revolt could be on the way.Reeves told HuffPost UK in March that she was sticking to Labour’s pre-election pledge not to put up income tax, VAT or National Insurance, meaning her options are limited.So it’s not surprising plenty of campaigners say it’s time for the government to bring in a wealth tax on the super-rich.How would a wealth tax work?Former Labour leader Neil Kinnock, who now sits in the House of Lords, re-ignited the conversation about a wealth tax on Sunday.He said the policy would show fiscal boldness, raise revenue and act as a “substantial gesture in the direction of equity fairness”.The peer suggested introducing a 2% tax on anyone in the UK with wealth over £6m or £7m, and claimed that would raise £10bn or £11bn per year.“This is a country which is very substantially fed up with the fact that whatever happens in the world, whatever happens in the UK, the same interests come out on top, unscathed all the time, while everybody else is paying more for gutted services,” Kinnock said.Labour’s Richard Burgon has advocated for a wealth tax for years.The left-wing MP told HuffPost UK is “not just a moral imperative” but “a practical solution to some of the biggest challenges we face”.He even brought a petition – signed by more than 77,000 people – calling for a wealth tax instead of cuts to disability support to parliament last week.“The numbers speak for themselves,” the MP for Leeds East said.“A modest wealth tax of just 2% on assets worth over £10 million could raise £24 billion a year. Such a wealth tax would affect only around 20,000 people.“The country is crying out for investment in our NHS, schools, our energy and transport infrastructure and in building social housing.“A wealth tax could raise vital funds for all that. It is also a fairer and real Labour alternative to disability benefit cuts and the winter fuel payment cuts we saw.”According to research by the More in Common think-tank, a wealth tax would be the most popular tax policy the government could introduce.Burgon adde: “Two in three voters want a government that stands up for ordinary people against wealthy and financial elites. Through introducing a wealth tax, this Labour government would be doing that.”With suggestions of a wealth tax back on the agenda, our polling shows from a public opinion perspective wealth taxes are more popular than not on their own terms, and relative to other taxes they’re the most popular way to raise new money. pic.twitter.com/JfU6cnf8w2— Luke Tryl (@LukeTryl) July 7, 2025The Fire Brigades Union, which is affiliated to the Labour Party, has joined the calls for a wealth tax too, calling it an alternative to Tory austerity.Its general secretary Steve Wright posted on X this morning “anything less could see us sleepwalking towards the disastrous nightmare of a hard right government led by Nigel Farage”.The Green Party has backed the idea, too.Co-leader Adrian Ramsay told HuffPost UK: “If the prime minister learns anything from the dog’s dinner that was the welfare bill it should be this: he needs to start listening to voices within his party.“Calls for a wealth tax are growing across politics, not because it’s radical, but because it’s common sense. If we’re serious about the need to fund public services and fix our crumbling infrastructure a wealth tax isn’t just sensible, it’s essential.”Campaign group Tax Justice UK claimed Labour needed to implement this tax or “risk losing the next election”.Its Interim deputy director of external affairs Fariya Mohiuddin told HuffPost UK: “A relatively small number of people have hoarded unbelievable fortunes while millions are struggling to get by and key services we all rely on are starved for the funding required to deliver what people need.“As it stands, implementing a small number of changes to the existing tax system today – to tax wealth – would raise tens of billions of pounds.“They should go further and levy a net wealth tax on the super-rich to boost public finances even more and get on with making Britain a country fit for the 21st century, where everyone’s needs are met or risk losing the next election.”What do the opponents say?The Institute for Economic Affairs’ Kristian Niemietz had a more sceptical approach, and claimed this would be “pure signalling to the left”.He claimed this was “clearly a panicked response” from Labour after Jeremy Corbyn and Zarah Sultana announced they were in the process of setting up their new socialist party last week.Speaking to Times Radio, Niemietz warned such a policy could lead to “capital flight” or lower savings rates, which would reduce the amount the government would make from the wealth tax in the first place.Niemietz also pointed out that a wealth database would need to be constantly updated for this policy to work.“They are an administrative nightmare and that is the reason why most countries have abandoned them over time,” he said.The shadow Tory chancellor Mel Stride claimed that Kinnock’s wealth tax would be “the worst thing to do”.He added: “We’ve also seen around 10 to 15,000 high net worth individuals leave our country as a result of this overnment’s policies.”What does the government say?Rachel Reeves has previously ruled it out, but No.10 has appeared to leave the door open to a potential change of heart.The prime minister’s official spokesperson said today: “We have repeatedly said that those with the broadest shoulders should carry the greatest burden and the choices we’ve made reflect that.“The top 1% of taxpayers contribute nearly a third of income tax.“Revenue from wealth and asset taxes like capital gains tax and inheritance tax go towards funding tens of billions of pounds for the public services.“The government is committed to ensuring that the wealthiest in our society pay their fair share of tax.“You’ve also got what the chancellor has said in the past, that were not going to be bringing in a wealth tax.”Back in April, Reeves told The Telegraph: “We’re not interested in a wealth tax. our priority is to grow the economy, and that’s the way that you make working people better off and secure better public finances.”Related...Tax Expert Says Nigel Farage's Latest Policy Would Leave A £34 Billion Black Hole In The Nation's BooksStarmer Must Raise Taxes To Fend Off 'Existential' Farage Threat, Ex-Cabinet Minister WarnsNigel Farage Accused Of 'Billionaires' Giveaway' Over New Tax Policy

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